Levels and Plan for 22nd April

The Market worked off a small balance today and showed two time frame behavior for the most part. However a sharp sell off on heavy volumes in the closing hour ensured the markets closed at lows yet again . We are almost at the imbalance objective and watching 8464 spot also above to confirm the bull’s interest in taking the index up again.

In the Paras below you will find my daily plan for the day at the bottom with weekly support and resistance levels updated on the spot and the medium term auction. It’s a view on 3 different timeframes. Auction Market Theory tells us where to trade. The Order Flow will show us when to trade.

Nifty APR F

Background / Previous Auctions :

Medium Term: On Friday May 16th 2014, we saw a range of 7560- 7125 (spot prices) and we believe it forms the backdrop of the moves we may see in the Nifty for a considerable amount of time, as it was a 5 sigma event. The auction remains positive as long as we close above the highs of that day (May16).There was a failed auction noted at the lows on 17/10 at 7723 which is a reference point and support line for the future.

At 9119 the market may have put in a top for the year and should roughly consolidate in the 8200- 9119 zone for the rest of this year.

Weekly levels :

(first updated 19/04)

review :

(On spot prices)

Last week the expected move to price objective of 8912 fell short by 67 points as supply came at the 8850 mark in a market which rallied for 11 sessions holding VAH and an MO of 80 plus. Something had to give and the sellers forced the late longs off the table quickly.

For the coming week we will find the Nifty trading close to the 8560-8580 support band early in the week but at risk of more longs being pushed out on rallies to 8685 spot.

Trading below the 8685 spot mark this week should point to new supply coming into the index . The sellers should maintain control till 8735 spot is not taken out convincingly and on closing basis.

. An upmove during the week which meets new sellers at 8685 spot should point to 8342-8321 spot as the final objective of the move these next few sessions with stops on a closing above 8740 spot.

Observations in Today’s/ Previous sessions :

(based on Fut prices)

#) The NF profile was a normal variation day which the seller dominated and closed at lows.

#) As in the preceding upmove which closed above VAH for 11 sessions this mini downtrend is closing below VAL for 5 sessions now

#) vwap of the day was at 8452 with volume of 148.3 L (Same as Previous session)

#) Profile closed below VAL for the fifth straight day this series.

#) Heavy sell volumes hit the market just after 2.30 near 8455 levels.

#) 8348 F and 8253 F are the 2 ref lines below and 8560/ 8570 will be resistance all week

#) The auction will be deemed weak all tomorrow staying below the high volume 8460 zone

#) Discl – When we mention Buyers/ Sellers we point to and infer aggressive players.

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#) Day saw sellers at 8570 and 8558-8552 ( 20/04/15)

#) Day saw sellers at 8660 today ( 17/04/15)

#) Pull back high of the day 17/04 is 8749 and resistance into any pullbacks

#) Day saw sellers active at 8742 and 8752 on ( 16/04/15)

#) Profile showed sellers coming at 8882 on 19/03

#) Excess seen at 8938 to 8898 on 13/03.

#) Scene of the crime was at 8892 F on 13/03.

#) Day Profile of 09/03 shows excess from 9000 F

#) Excess also at 9250 on 4/03

Hypothesis :

( Based on Apr Futures)

K.R.A is 8434 ( K.R.A= key reference area)

Hypo1) If NF auctions above 8470 then longs should move it to 8508 F and possibly 8560 above 8510 . Sl for this view is 8434.

Hypo2) If NF auctions below 8434 then it should move to 8370 and 8348 . Sl for this view is 8471.

BankNifty APR F :

Background/ Previous Auctions :

( updated 22/03)

Medium Term- 20520 is now showing excess and the BankNifty has not been able to stay above the 19200- 19300 zone which hold vwaps for Jan and Feb. There has been some serious selling seen in the BankNifty at the 19370 spot levels in March . This makes us revise our opinion of the 18400 spot holding and we should see the index drifting down below to 17600- 17700 spot levels over the coming sessions. We will update our view to the potential next drop to 15900/ 15600 zone and finally 15100 once we see an auction at 17600 levels.

Weekly levels :

(first updated 19/04)

(based on spot prices)

Last week the fast move below 18800 on that failed upper move brought pressure on recent longs to close positions and the BN went below second support mentioned for the week at 18598 quickly.

For the current week there is more evidence of supply building up at 18724 and 18810 . We can see all up moves to these points in the coming week meeting up more supply.

Support for the index is at 18232 and at 18131 right below it. If 18800 is not taken out on closing basis the destination trade in the coming sessions is at 17900 spot.

Observations in Today’s/ Previous sessions :

(based on Fut prices)

#)The BNF was an inside day profile which worked out the minus distribution seen yesterday

#) Day type was a normal variation day with buyers in the morning sessions and sellers dominating the afternoon.

#) vwap was at 18227 with volumes of 36.8 L (Less than the previous session)